Contractor or employee? How the ATO and Fair Work decide, for OTs, speech pathologists and physios

Whether you’re a contractor or an employee isn’t decided by having an ABN or sending invoices: since 26 August 2024 the Fair Work Act looks at the “real substance, practical reality and true nature” of the whole working relationship. The ATO uses a different test for tax and super, and even if you are a genuine contractor, it says you’re entitled to the 12% super guarantee if you’re paid wholly or principally for your labour.

This is general information, not legal or tax advice. For your own arrangement, talk to an accountant, a lawyer, or the Fair Work Ombudsman.

I’m a physio and I run a multi-site paediatric allied health practice in South East Queensland. This page sets out what the official sources say, so you can ask the right questions before you sign.

Two tests, not one

The ATO and Fair Work ask similar questions, but they’re not the same test, and you can get different answers.

Fair Work’s indicators include control over how, when and where you work; who carries the financial risk; who provides the tools and equipment; whether you can delegate or subcontract; your hours; and whether ongoing work is expected. No single factor decides it.

The ATO’s indicators are similar (control, integration into the business, how you’re paid, delegation, tools, commercial risk, goodwill), but since 2022 it reads them through the contract. The ATO says the older “multifactorial” test is no longer used on its own.

Opting out. If you earn above the contractor high income threshold (A$190,100 from 1 July 2026), you can choose to opt out in writing, so your status is judged at the start of the relationship rather than on the whole relationship as it plays out. This changes only the Fair Work test, not the ATO’s test for tax and super.

Super if you’re a contractor

The ATO says that if you’re an independent contractor paid wholly or principally for your labour, you’re treated as an employee for super guarantee purposes, and entitled to super on the same basis. The rate is 12% of ordinary time earnings from 1 July 2025.

If you’re paid a percentage of fees, this matters. If you mostly provide your own clinical time, rather than running a business with your own staff and equipment, ask the practice in writing whether it pays super on top of your share. If you contract through your own company or trust rather than in your own name, or your invoices cover more than your own time, ask an accountant whether and how this applies to you.

What you give up as a genuine contractor

If you really are a contractor, the employee protections don’t apply. Under the award and the National Employment Standards, an employee gets at least:

• The award minimum rate for their level (from A$1,308.80 a week at Level 1 year 1, from 1 October 2026). See pay by setting.
• 4 weeks’ paid annual leave a year if full-time, plus 17.5% leave loading on the award rate.
• Notice of termination and, in larger businesses, redundancy pay. See notice periods and restraints.

As a contractor, your rate has to cover leave, sick days, quiet weeks, insurance and your own tax. Compare offers on what you’d actually earn across a year, not the per-session figure.

What changes for each profession

The tests are the same for everyone. What differs is how you bill and who checks your credentials.

• Occupational therapists: your registration with the Occupational Therapy Board of Australia (Ahpra) is in your own name, whoever engages you. If the practice bills Medicare chronic condition items for you, the OT item is 10958. Ask who sets your caseload, your hours and your rooms: control over those points towards employment.
• Speech pathologists: you’re not Ahpra-registered. Medicare and private health insurers need you to hold Certified Practising status with Speech Pathology Australia, and you need it for a Medicare provider number. The speech pathology chronic condition item is 10970. If you contract to several practices, check who holds the client relationship and the records. See Certified Practising, not Ahpra.
• Physiotherapists: your registration is with the Physiotherapy Board of Australia (Ahpra). If the practice bills Medicare chronic condition items for you, the physio item is 10960. If you’re paid on commission or a share of fees, the tests above matter, so ask what fee your share is calculated on.

For all three: the chronic condition items need a GP referral under a GP chronic condition management plan, each service must be at least 20 minutes, face to face and individual, and a patient gets at most 5 allied health services a year across all professions under these items.

Questions to ask before you sign

1. Am I engaged as an employee or a contractor, and why?
2. Who decides my hours, my caseload, my rooms and my equipment?
3. Can I send someone else in my place? (If not, that points to employment.)
4. If I’m paid a percentage, a percentage of what: the fee charged, or the fee collected?
5. Is super paid on top, and at what rate?
6. Who pays for my professional indemnity insurance, CPD and admin time?
7. If I leave, who keeps the clients and the records, and is there a restraint clause?

If the answers point one way and the contract says another, get advice before you sign. The Fair Work Ombudsman can help with whether you’re an employee.

Your next step

• OTs and physios: check your Ahpra registration is current in your own name, and work out your real annual earnings (including leave and super) under any contractor offer.
• Speech pathologists: check your Certified Practising status with Speech Pathology Australia, which you need for Medicare work whoever engages you.
• Everyone: decide which you actually want, salary or contract, before you start looking.

A confidential chat helps you compare a contract and a salaried role side by side without your current practice knowing you’re looking. Tell us what you’re after below.